All about Henry: High Earner Not Rich Yet
Who’s Henry? It’s an acronym that stands for High Earner Not Rich Yet, also known as the working rich because if they stop working, they’re broke. A high salary doesn’t always translate to being rich. It just means they make a lot of money, but that money isn’t being saved or invested yet and is instead being spent on a lavish lifestyle that might be above their means and the Henry might find themselves living from paycheque to paycheque when they don’t have to be.
Henrys could be successful content creators like YouTubers, TikTok stars, Instagram influencers, and Twitch streamers. With multiple income streams like Patreon, cash donations from fans, ad revenue, sponsorships, and merch sales, they can make a lot of money, but they still might not be rich yet. Some Henrys are entertainers like athletes and actors or they’re working professionals like engineers, computer programmers, doctors, dentists, surgeons, lawyers, accountants, and academics who might have student loan debt that they need to pay back.
When someone makes six figures or close to it how do they fall into the Henry trap? Well, that’s because they go through something called lifestyle inflation and that’s not exclusive to Henrys. Those who have gone from being a broke college student to working a decent job may go through lifestyle inflation where they stop living with roommates in cheap accommodation and they may rent a nice place where they can live on their own because they can finally afford it. You might buy a car instead of taking the bus or the train. Instead of buying clothes at charity shops or browsing the bargain rail, you’re buying more expensive clothes from boutiques. Going out to eat may have once been a luxury and you had to keep reminding yourself that there’s food at home, but now you can afford to eat out or get food deliveries more often and you might get into the “treat yo self” mentality more often.
Imagine you’ve grown up working class and didn’t have much money, you couldn’t buy the things you wanted to, and all of a sudden you make a lot of money. You might be tempted to splurge because you’re finally able to. Henrys have money to invest, save, or spend and companies that make luxury goods target Henrys. A Henry might want to keep up with their rich peers and so they buy luxury clothing, handbags, and accessories to go with their lavish lifestyle and they think it makes them happy. There’s nothing wrong with an occasional treat, but make sure it’s within your budget and you have money in your savings and you put some aside for retirement and investing. Make sure that your lifestyle is sustainable.
Having luxuries is nice and all, but what good is it if you can’t pay the bills and you find yourself struggling at the end of the month? What if an emergency happens like something in your house or car breaks? Will you have enough money to cover it?
This is why it’s a good idea to speak to a financial adviser if you’re a Henry. A financial adviser can help you come up with a financial master plan that will help give you the peace of mind and security you deserve and keep those three o’clock worries at bay. It’s even possible that you can go from a Henry to properly wealthy with the right plan in place.
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